In most cases, small business entrepreneurs focus on enhancing sales, which is all businesses’ motive. But people always forget to protect their ventures. As an entrepreneur, it’s your responsibility to protect your business and limit risks. You cannot control every eventuality. A good example is a Covid-19 pandemic. When the virus was discovered, no one expected it to cause havoc as it has done. Approximately 54% of small businesses closed down. Protecting your business can also mean protecting your clients, ensuring sales don’t go down and offering better services to maintain a reputable brand. Risk management is crucial for smooth operations. In any economy, a downturn can destroy your business if you have not implemented risk-management strategies. Some of the external risks include politics, fire, natural disasters, exchange rates, and interest rates.
When it comes to internal risks, you consider things like lack of business insurance, information breaches, growing too fast, employee theft, among others. As you can see, your business faces tons of uncertainties, and taking the right measures will save you lots of nightmares. So, how can you safeguard your business?
Separate Your Business from Yourself
In most cases, small businesses are run as sole proprietorships. This is a great risk, especially when the company gets sued. Your business’s legal structure will determine the type of tax you pay, the ease of selling the business, and personal liability. As a sole trader, the business liabilities will always fall on you. But operating the business as a limited company provides a certain degree of security to you and the entity directors. Once you separate the business, the personal liability will be limited apart from where misconduct or fraud cases are identified.
If your business is a sole proprietorship, you’d be required to pay all business debts from your personal finances. However, a limited company offers legal protection for your finances if the business experiences financial hiccups. An incorporated company conveys a professional image which helps you when securing contracts. A positive brand image boosts trust among customers and your partners. The professional image can also attract more prominent businesses. Operating a limited establishment is tax-efficient. The company dividends are not subject to the National Insurance contributions, unlike with sole proprietorship. More so, the pension contributions of a limited company are tax-deductible.
The selling or succession plan of a limited company is easy and straightforward.
Hire an Employment Lawyer
Undoubtedly, employees are the engine oil of any organization. They’re the face of your company, and they have an impact on the customer-business relationship. However, you might find yourself in a tight place with your employees. And with employment laws dynamism, it’s for your business interest to hire a reputable and reliable attorney. The employment lawyer assists you in dealing with sophisticated laws. An attorney can guide you to help you make informed decisions. In case you have a case, the attorney will guide you through discovery documentation. Hiring an employment lawyer protects you in the court of law in case of any motion filed against your company or you. With an attorney by your side, you’re guaranteed an extra layer of protection against various liabilities. If a disgruntled worker files a case against you, it’s the employment lawyer who will fight for you.
Protect Your Clients
As a small business, you’re challenged to retain the trust of your customers. Happy clients will share a testimonial about your business which can help you gain more consumers. But the client needs to be assured that they can trust you. Ensure you’re creative and polite when engaging clients on social media platforms. You can use the customer’s images, texts, or photos in promoting your business. However, make sure you have the consent to use someone’s quote or picture. Ensure you establish a reliable communication channel. You can choose chat for website when dealing with emergency issues. You may also consider text messaging since it’s non-invasive, fast, and cheap.
Furthermore, clients would want to know that their financial information is well protected. If you want to keep security deposits or billing information for recurring data, ensure that data is highly encrypted.
Be Careful of What You Say and Do
Your brand image is crucial for running a successful business. Your brand represents you in the eyes of partners and consumers. The brand reputation is your biggest, intangible asset that must be safeguarded. That is why you should train employees to avoid conducting business or announcements that are questionable. It includes slanderous statements or doing business with unreliable individuals. Doing business with people known for shoddy practices will jeopardize your business reputation. You should also avoid situations that can lead to a conflict of interest. Whatever you say or do may end up online.
A major source of online negativity is disgruntled vendors, competitors, and employees. You can avoid this by keeping your workers and associates happy. Employee satisfaction plays a crucial part in branding. Ensure you get your team involved and make them feel part and parcel of the business. You can also start the employee satisfaction program to keep your staff motivated. Alternatively, you can generate your press. You can even control comments and reviews by staying active in social media forums. Generate authentic, evergreen content and address customer queries publicly and as soon as possible.
Negative press can sink your business. Take care of customer data by using secure and reliable hosting platforms that provide leak protection and robust encryption. Network infiltration can also be avoided by educating your employees about the risks of a security breach. In the era of advanced digital technology like machine learning, IoT, and AI, human-to-human interactions are diminishing pretty fast. That is why employing advanced technology will free your staff to focus on customer pain points. Engage your clients through writing emails, text messaging, initiating a loyalty program, and offering birthday greetings. Above all, hire a reliable management firm to monitor the brand presence and protect your computer network.
Appoint a Risk Management Team
Risk management should be part and parcel of an organization. Leaders can identify threats that can hinder your business growth and find viable solutions. Risk management will fundamentally affect your ways of making decisions. The risk management team will pinpoint trouble spots and enable you to address the potential threat before it escalates. This is especially helpful when dealing with several projects because you’ll know the project that’s slugging behind schedule.
With good risk management, you’ll minimize surprises in the business. This way, there’ll be no delay in taking the right mitigation action on time. Early awareness of potential threats enhances team spirit. Prudent risk management practices enhance smooth communication in the company. It fosters discussion on troubling topics based on current and factual information. Knowing every potential threat is taken care of raises expectations and possibilities for success in the business. Additionally, good risk management strategies allow the team to focus on crucial areas for enhanced productivity. This way, you’ll eliminate guesswork and delays for more business growth.
Ensure Your Business
Operating a successful business comes with inherent risks. A natural disaster l flood can ruin your things, a client might file a suit, or an employee or client can get injured on your premises. For these reasons, ensuring your business is indispensable. Getting your business adequately insured provides bodily injury coverage to you or any other person. In such a scenario, the liability insurance cover will cater for any injury caused. If the business causes damage to other property, the insurance will cover such losses.
A business insurance plan reduces financial losses on any eventuality. If your company violates copyright rules, it can lead to infringement issues. But the liability insurance will come to your rescue to cover all legal liabilities of such claims. During economic downturns, most businesses end up making losses. In such eventualities, the insurance company will share the risk. The customers, public, and shareholders will also suffer. Fortunately, an insurance company will help manage bad occurrences by protecting the business and clients attached to your business.
Protect Your Files
Whether you run a huge organization or operate a small business, vital business documents need protection. Documents that contain personally identifiable information, financial records, and internal files should be protected. One of the ways to offer protection is using a password to restrict unauthorized people from accessing files. Apart from having a locked filing cabinet, you may also need to make digital copies. Ensure you’ve scanned all crucial files and save them in a cloud-based service. You won’t worry about your computer crashing, break-ins, or a natural disaster destroying your documents with cloud-based storage.
More so, you can use eSignatures to sign documents digitally. Electronic signatures eliminate the process where sensitive data is sent via email, which is a huge security threat.
The Bottom Line
Running a successful business comes with tons of risks. As you work hard and smart to boost your sales through digital marketing, don’t forget to protect your business. It’s your sole responsibility as an entrepreneur to protect your company and personal assets. With these seven actions under your belt, the business will be in a stronger and stable position to weather any risk.